Thank you, and good morning, everyone. Welcome to SiriusXM's Second Quarter 2019 Earnings Conference Call. Today, Jim Meyer, our Chief Executive Officer, will be joined by David Frear, our Senior Executive Vice President and CFO.

At the conclusion of our prepared remarks, management will be glad to take your questions. Scott Greenstein, our President and Chief Content Officer; and Jennifer Witz, our President of Sales, Marketing and Operations, will also be available for the Q&A portion of the call.

First, I'd like to remind everyone that certain statements made during the call might be forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These and all forward-looking statements are based on management's current beliefs and expectations and necessarily depend upon assumptions, data or methods that may be incorrect or imprecise. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. For more information about those risks and uncertainties, please use SiriusXM's SEC filings. We advise listeners to not rely unduly on forward-looking statements and disclaim any intent or obligation to update them.

As we begin, I'd like to remind our listeners that today's results will include discussions about both actual results and pro forma adjusted results. All discussions of pro forma adjusted operating results assume that Pandora transaction closed on January 1, 2018 and exclude the effects of stock-based compensation and certain purchase price accounting adjustments.

We continued our track record of strong execution in the second quarter, and I'd like to once again thank our combined team at SiriusXM and Pandora for working so well together towards our goals.

In the second quarter, pro forma revenue grew at 9% to a record $1.98 billion and adjusted EBITDA grew by 22% to a record $618 million. We are increasing our full year guidance for both metrics, and we now expect to approach $7.8 billion of pro forma revenue and $2.35 billion of adjusted EBITDA.

We added nearly 300,000 self-pay subscribers at SiriusXM, which keeps us on track to meet our full year guidance of self-pay net additions approaching 1 million. I remain very confident in achieving all of our public guidance.

The SiriusXM business is really performing well. Churn remains near record low levels. ARPU at $13.83 has never been higher, and gross profit at SiriusXM also set a record in the second quarter.

At Pandora, we are well under way with a much needed restructuring efforts. But the real work on changing usage trends is just beginning. This will come from adding more content to the platform, improving the app and user experience and better deploying Pandora in car.

We continue to find incremental cost savings, and I'm happy to note that in our first full quarter of operating Pandora, the business delivered positive adjusted EBITDA in the second quarter from a $35 million adjusted EBITDA loss in last year's second quarter. This is a huge swing to the positive and will drive more than a $100 million EBITDA improvement in 2019 over 2018.

Let me re-emphasize, by combining SiriusXM and Pandora, we have a business with world-class expertise in both subscriptions and advertising.

Business models evolve over time. And by having both revenue streams and both skill sets, we have tremendous financial and operating flexibility in how we go to market.

We have scaled platforms on both sides of the coin, reaching a combined 100 million listeners, and have a full product offering that ranges from super premium, high-value subscriptions with unique, exclusive content to advertising-supported free services. We're working hard to build a platform with differentiated offerings that fit every American consumer, and we expect our audience reach will be extremely beneficial to both artists and advertisers.

Our long-term growth strategy has a strong foundation. Starting at SiriusXM, the strength of our OEM relationships mean we continue to build out the car fleet for many years to come, powering growth from new and used car buyers. The fleet should grow from about 121 million today to about 220 million over time. Our new car penetration rate, now in the low 70s percent, will climb to about 80% next year. The appetite for SiriusXM by the auto companies is the highest it's ever been.

The addition of 360L, which marries satellite broadcast with streaming, vastly enhances

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Access and features are designed to enhance our value proposition and strengthen our consumer franchise.

We are also using streaming-only plans like our SiriusXM Essential plan to appeal to consumers who don't have a car or need in-car satellite subscriptions. And beginning soon, SiriusXM will offer a $4-per-month student-only online plan. We think it's smart to make our content available to younger listeners as easily as possible.

With these additional plans, our upgraded app and wider distribution across smart speakers, I'm optimistic we can grow this business.

At Pandora, we are not only focused on near-term and sustained profitability, but we are also rolling out product enhancements and moving toward a strategy of increasingly differentiated content with more curation.

Features like Voice Mode and Pandora within Waze are just 2 examples of how we're making it easier to use and interact with the service. We also recently launched student and military plans for Pandora Premium priced at $4.99 and $7.99 per month, respectively.

We are continuing to experiment with offering content in front of the paywall. For example, many SiriusXM talk shows are now available in podcast form on the Pandora platform. And these have risen to become some of the most popular podcast content on Pandora. Stabilizing the user base and the ad-supported listening hours will not be done quickly or easily. But we expect that with these investments in content and product, combined with better OEM support, we can alter this trajectory over time.

We are committed to driving the Pandora business with sustained profitability. Monetization trends are very strong on the ad-supported business with RPM of $80, setting a second quarter record and climbing 17% year-over-year on the back of strong sell-through, solid performance from our agreement with SoundCloud, continued growth of our AdsWizz platform and improvements from our investments in programmatic technology.

This and improved efficiencies in our music costs on the subscription side drove Pandora's gross margin up 650 basis points year-over-year. And as I said, combined with fixed cost reductions, we expect the business to contribute EBITDA going forward.

With both brands, content is our lifeblood. And as time goes on, that takes on even greater meaning for SiriusXM as we execute in the competitive space of audio entertainment.

We seek the most compelling, relevant and frankly fun and exciting brands and hosts to work with. Our creative collaboration with Drake across Pandora and SiriusXM is an example of what is possible with our combined scale. This guy is just so talented, and he's now the most streamed artist in history. We couldn't be more excited to be working with Drake and his team, and we'll have much more to say when we announce our fall launch as we get -- in the fall as we get closer to our launch.

We have expanded our relationship with comic superstar Kevin Hart, doubling the time and number of shows he's doing for us on his exclusive Laugh Out Loud channel. We've launched our first daily live programming for our Netflix channel, Netflix Is A Joke Radio. The show is recorded from our new, state-of-the-art broadcast studio in Hollywood where we are now broadcasting a growing number of shows across our talk, music, sports and entertainment channels.

We also believe that subscribers should get more than just a great audio service for their car or home subscription. And so we continue to create great live events they can be part of. Lady Gaga played a once-in-a-lifetime show for SiriusXM subscribers and Pandora listeners in late June at Harlem's Apollo Theater, marking the first major joint event of the 2 brands. And we are finding that Pandora's live events are also of good value to the national audience of SiriusXM. Pandora's live show with rising country music star Maren Morris in Nashville was also broadcast nationally on SiriusXM. And country superstars Florida Georgia Line performed in Nashville for SiriusXM subscribers at the famed Ryman Auditorium.

We continue to strike important deals with leading content brands with faithful and large communities of followers. We've announced plans to launch a new music channel with SoulCycle that brings the sound and vibe of SoulCycle wherever you are with music curated by influential instructors.

And we continue to super serve in music with a string of limited time channels -- we call them pop-ups -- from an array of artists such as Madonna, Cher, Dave Matthews Band and the music of Pavarotti. We've launched a new jam band channel with Phish, and Hallmark Channel Radio returned with music for the important wedding season.

The idea of music at SiriusXM is exactly the opposite of just listening to generic playlists. We believe branded channels and collaboration with top artists really provide differentiation and a unique entertainment experience that our subscribers have proved are willing to pay for. Drake is just our next example. But look at what we've done with The Beatles, Bruce Springsteen and countless other mega talents. The process will be a bit fluid, but we'll certainly be experimenting with some of this on the Pandora platform as well.

So as you can see, we are driving both brands forward with exciting new content, features and even more distribution. We're driving cost efficiencies throughout the combined business using our scale to strike new deals that would not have been possible without our massive reach and doing all of this with a focus on growing the cash flow our strong business model can deliver to our stockholders.

I'm pleased to report that so far this year, we've repurchased $1.8 billion of our shares and paid about $110 million of dividends. The second quarter repurchase of approximately 158 million shares for nearly $900 million represents the biggest quarterly total of open-market repurchases in shares and dollars since the program commenced in early 2013.

It's also important to note that from the time we announced the Pandora transaction, we have now bought back all of the shares we issued in the acquisition.

Meanwhile, David and his team have continued to optimize and refinance our balance sheet by raising debt capital at extremely attractive rates and terms. I remain very confident in our public guidance for subscriber growth and free cash flow. And I'm pleased to increase our guidance for pro forma revenue and adjusted EBITDA.

This is an extremely exciting time for everyone at SiriusXM.

I'd also like to welcome Jennifer Witz for the Q&A portion of this call. Jennifer has been helping us grow SiriusXM since I joined in 2004, and she recently assumed the position of President of Sales, Marketing and Operations. I know you will come to appreciate her outstanding contributions to and knowledge of our business.

The first half of 2019 has seen a higher monetization profitability of the newly combined SiriusXM and Pandora, coupled with a record pace of capital returns. Pro forma revenue grew 9%, pro forma gross profit grew 11% and adjusted EBITDA grew 22% year-on-year to an all-time record of $618 million, demonstrating the strong, leverageable business model the combined company brings. As Jim mentioned, Pandora was accretive to adjusted EBITDA in the second quarter, a remarkable turnaround from a reported negative $36 million of adjusted EBITDA just 1 year ago. As we approach the 1-year anniversary of the announcement of the Pandora acquisition later this quarter, we bring you a company with significantly more adjusted EBITDA and fewer outstanding shares than we had 1 year ago.

As I discuss the results for the quarter, I'll focus on the pro forma results, which combine the 2 companies for the full quarter in both years.

Auto sales were down slightly in the second quarter 1% with SAAR still coming in strong at $17 million. Penetration rate exceeded 72% in the quarter and remain confident that our pen rate will reach 80% next year.

The installed base of vehicles grew 11% year-on-year to 121 million or approximately 46% of the total cars on the road.

The used car penetration rate was approximately 44% in the quarter, jumping 500 basis points year-over-year and helped lift self-pay gross additions from the used car channel to a record 39% of the total, up from 35% in the prior year period.

Used car penetration rate will increase steadily over the next several years as it inevitably climbs to match the new car pen rate.

Used car trial starts grew 11% in the quarter, and at the end of the quarter, the total trial funnel stood at over 9.4 million.

Self-pay net additions at SiriusXM in the quarter were approximately 290,000, bringing the self-pay base to more than 29.3 million subscribers. Conversion rates in our new and used car business remained strong at just below 40% and in the upper 20% range, respectively.

Our streaming-only plans also continue to gain traction. Churn in the quarter was just 1.7% per month, 6 basis points higher than second quarter '18's all-time low of 1.6% but still well below the low end of our expected range as rising vehicle churn continues to be offset by improving voluntary and non-pay churn.

Total net additions in the second quarter were 174,000, resulting in a total subscriber base of over 34.3 million. This represents a decline of 116,000 in the paid promotional bucket driven by slightly lower auto sales, higher fleet mix and lower shipments from OEMs with paid trials.

SiriusXM ARPU in the quarter was a record $13.83, growing approximately 4% year-on-year. Together with 3% growth in our sub-base, SiriusXM segment revenue for the second quarter grew 7% to more than $1.5 billion.

Total cost of services at SiriusXM increased 7% to $594 million in the quarter driven by higher revenue share and royalties and programming and content costs, although they remained flat as a percentage of revenue.

At Pandora, advertising revenues grew 13% to $306 million, a second quarter record. Higher in-quarter bookings, strong sell-through, growth from the AdsWizz platform and contributions from the SoundCloud partnership drove the strong performance.

Growth in ad RPMs continues to accelerate, reaching $80.14 in the quarter, approximately 17% higher than the second quarter of '18.

MAU and ad hours trends continued with MAUs down 9% to 64.9 million and ad hours down 10% to 3.49 billion. Pandora's audience trends have been years in the making. As Jim discussed, we are committed to investments in content, distribution, product and technology to ultimately improve audience performance at Pandora.

Pandora's self-pay subscribers grew by 64,000 net additions in the second quarter to a total of 6.22 million. Paid promotional subs were down by 3,000 year-on-year, bringing total net additions in the quarter to 61,000.

The growing subscriber base produced subscription revenue of $135 million, up 18% over the second quarter of '18. Total Pandora revenue in the quarter grew 15% to $441 million.

With total cost of services increasing only 4% over the prior year to $284 million, Pandora's gross profit jumped 40% to $157 million in the second quarter. This represented a margin of approximately 36%, 700 basis points higher than the second quarter of '18 with the expansion driven primarily by lower revenue share and royalties and customer service and billing expenses as a percentage of revenue.

We've always said that business models matter. Our full stack of audio entertainment products, from ad-based, persistently free music to premium subscription products, appeals to a broad cross-section of over 100 million North American listeners and delivers one of the most attractive business models in media.

For the combined company, pro forma revenue grew 9% or $160 million over the second quarter last year. $111 million of this increase or about 69% fell through to pro forma gross profit, driving it up 11%. And all of the increase in pro forma gross profit fell through to adjusted EBITDA, driving it up 22% to $618 million.

Adjusted EBITDA margin was 31.2% in the second quarter, growing approximately 330 basis points from 27.9% a year ago. We converted about 77% of this adjusted EBITDA into free cash flow, totaling $474 million in the second quarter of '19.

Second quarter net income of $263 million declined 10% over the prior year primarily due to a onetime, $86 million benefit to other income last year driven by unrealized gains from our investment in Pandora.

Our effective tax rate for the second quarter was -- 2019 was 22.4% compared to 19.4% in the prior year with the change driven primarily by lower recognition of excess tax benefits related to share-based comp. We expect our full effective year tax rate to be approximately 23%.

Earnings per diluted share for the second quarter '19 on a GAAP basis was $0.06 with a fully diluted average share count of 4.68 billion shares.

Based on our strong performance in the first half of the year, our new pro forma guidance for '19 calls for revenue approaching $7.8 billion, adjusted EBITDA approaching $2.35 billion, and we are reiterating our guidance for self-pay net subscriber additions at SiriusXM approaching 1 million and free cash flow guidance of approximately $1.6 billion.

In the second quarter, we spent approximately $898 million to repurchase nearly 158 million shares at an average price of $5.70 and paid $56 million in dividends to our stockholders.

Year-to-date capital returns through Friday are close to $1.9 billion.

As mentioned, all of the shares we agreed to issue at a price of $6.98 to acquire Pandora have now been repurchased and retired at an average price of $5.90.

During the quarter, we issued $1.25 billion of 10-year, 5.5% bonds to pay down our revolver. Towards the end of the quarter, we announced the issuance of $1.5 billion of 5-year, 4.625% notes for redemption of our outstanding 6% July 2024 notes. But both issuance and redemption of these instruments occurred in early July.

Total debt now stands at approximately $7.8 billion with no material bond maturities until August 2022.

I wanted to ask about your outlook for Sirius self-pay net adds. I think your guidance implies net adds will sort of be back-half weighted. And so I wanted to help understand what the main drivers are behind that. And relatedly, the -- that lower penetration rate that you saw in the first quarter, to what extent was that a drag on the 2Q net add results that you reported or maybe even full year results? Any color there would be appreciated.

So the lower pen rate, the same thing we talked about in the first quarter, right, that it's in part fleet mix and it's in part related to headunit change in the manufacture that goes -- swing back around. We're definitely expecting pen rate to pick up as we go through the rollouts at both Toyota and GM that are increasing penetration or on track for hitting 80% next year.

With respect to self-pay nets, the year for -- from a management perspective is unfolding exactly as we had expected it to. And we are just slightly above what our internal plan was at this point in the year, and it really is just playing out exactly as we had seen it.

Got you. And then just again, the back half-weighted piece, does that have to do with your outlook for SAAR? Or does it have to do with the increasing pen rate of Toyota? Or is there anything else there that's sort of driving a big picture?

Well, yes. I mean the increasing pen rate in the second half of the year from the rollouts is really going to benefit self-pay subscribers next year, right? It won't have so much of an impact this year. So it's really just nothing more than the way the calendar plays out.

Yes. I'll just amplify what David said, we track this extremely closely, as you can imagine. I want to reiterate what David said. Number one, penetrate -- auto penetration is simply not a worry for me. We're on a gray trajectory there, and we're very confident in the second half.

I guess my first -- real quick for David. Performance year-to-date at Pandora has been quite strong. Legacy Siri also performing well. Increased EBITDA guide for the full year. Is there any sense on, I guess, run rate synergies by year-end for Pandora? And then I guess as a part of that question, you talked a little bit additional content on the platform, whether it be legacy Siri as well as Pandora. The Drake announcement this week as an example. Is that offsetting some of the EBITDA benefits you might be hitting? Or should we expect that to mitigate some of the costs that come through to mitigate some of the outperformance so far this year? Just any thoughts on that.

Sure. So look, we've been involved with the Pandora business for a long time either from sitting on the Board or just from looking at it and having had continuous discussions. And part of our plan always was to invest in additional content that would benefit both platforms. And so as we look at things like the groundbreaking deal that we've struck with Drake, that investing in content is, in fact, part of the plan. So yes, that will offset, I guess, synergies. But it's all been part of the guidance we've already given. And as we start working on where we're headed for 2020, it's incorporated in that thinking as well.

With respect to the synergies, we are -- we're right on track. We gave you an update in guidance in the first quarter call. And in the synergies, we're coming in stronger than we had originally guided to. We are on pace for that. And again, I said it in my comments, business models matter. And you saw us drive monetization at the top line and drop it through to EBITDA, and we continue to -- we expect to continue to do things like that.

Great. I had one quick follow-up, just a question for Jennifer. You have several different announcements this quarter, whether it be the implementation of streaming to Select hubs; additional channels as well; and obviously, 360L, I guess, with Cadillac, an additional OEM with Cadillac launching. Just as you kind of think about broadly the levers across the different ops that you're implementing, how do you see that rolling, impacting the bottom line potentially through engagement, leading to lower churn and a higher EBITDA? So I guess some of the thresholds or key KPIs that you're kind of looking at going forward as a part of your role.

So you really touched on it. I mean it's really delivering more value to our customers and in 2 ways, right? Additional content because until 360L is more broadly rolled out, as you know, we're pretty limited in what we can deliver into the car. So it's more content in more ways on more platforms and increasing that engagement outside of the car. And then eventually, we'll be able to roll out this content and these features through our 360L implementation.

I have 2 different questions. First, on content. Maybe this is Scott, but -- or Jim. It seems like everyone in the audio industry is focused on podcasts. Can you talk a little bit about your podcast strategy and how that's going to help you differentiate you from competition? And continuing on the content, you guys mentioned Drake a few times. How different will that collaboration be with some of the other artist channels like Pitbull? And on the SoulCycle recent announcement, it seems like you're going in a completely different direction, maybe more lifestyle. So can you talk about what's going on with that? And then I have a related question later on.

So let me just jump in and Scott will take the majority of it. So I agree with you there is a podcast announcement, seems like, every day. I think look, we're very committed to the podcast space. We feel like we built talk premium radio. And so I think -- we think we have a really good understanding of what listeners want in terms of spoken word.

There's a long way to go, in my opinion, in 2 areas. The first one is exactly what content do people really want in podcasting. Right now, it seems to be a race as to who can put the most stuff up, which personally I don't believe is what's going to win. I believe, and I think Scott will reiterate with me we believe that probably, more branded content is probably more important in the space. But we'll continue to work there.

As important, Jessica, as you well know, there's content everywhere, but it's almost like a flea market in that it's up there everywhere and no one can find it and no one can find it easily. And so we're busily working on those 2 things that we think are kind of gatekeeper kinds of things that need to be done for this stuff to finally catch fire. That doesn't mean we won't keep introducing it. We've been really happy with, for instance, with what we've seen with Kevin Hart and what we've seen listeners respond to that. So -- but there are a few big things that need to happen, I think, before this becomes a mega audience. Scott, why don't you take that and Drake?

On podcasts. Yes, as Jim said, and -- our strategy has always been -- it's sort of a twofold strategy. Pandora will acquire a lot of podcasts that are out there. So it's a convenience factor for a lot of the listeners that they don't have to go elsewhere to find it. So to date, Pandora has already picked up about 3,000 podcasts and well on their way towards their goal of between 5,000 and 10,000 by the end of the year. So we do -- we have a lot of convenience of having most of the major, if not all, the top podcasts available on Pandora.

Sirius, which will continue -- SiriusXM, which will continue to be very active in audio content, as always, will feed those podcasts with a whole another layer, and that's what Jim mentioned with Kevin Hart, Andy Cohen and a number of other ones we have are going to be repurposed, in some cases original podcasts created with those artists, that will be completely unique. And this will separate us at one level from everyone else. That is going to be unique to the SiriusXM and Pandora platform. And so those will be another layer of that.

And then the last piece, which more to come at a later call, are going to be the big names and big brands that actually are not in podcasting yet that will likely make one-off big podcasting deals to be part of the platform. Those will -- look more reminiscent of the SiriusXM early talk deals but will be triggered by both a component potentially for talk radio but mostly for podcasting. So there are layers to go on that.

On Drake, it is unequivocally the deepest we've ever gone on any artist deal. All our other artist deals are largely content deals with a little bit of marketing. This is a very deep, 2-platform, SiriusXM and Pandora, deal. It has multiple content components. It does have marketing components that will roll out later and other things with it that will show how deep and unique this deal is. More to come on that.

SoulCycle is really consistent actually with what we've always done, is look for interesting brands that haven't gone into the audio space and figure out, are they suited for our audience. And we consistently get requests, or even our generic workout channels, as part of a new 100 channels we added with Polaris. The demand for this is constant. So anyone jogging, working out at home, walking to work, in whatever version you want, is looking for some sort of music or backdrop to this. And SoulCycle is a natural extension to that. All the major instructors have already recorded they're interstitial. This channel will be launched, and it will feel like a virtual SoulCycle. And there's other brands like this out there that we'll be touching on.

Amazing. It so creative. And then for David. As you said, capital returns this year are so far already $1.9 billion. Historically, you've been around $2 billion. Can you -- how should we think about capital returns for the rest of 2019 and beyond?

Well, I think about all I can say is, is that when the stock runs, we tend to lighten up on buyback. And -- but when it falls, if we think there's value there, we're not shy about going heavy. And the stock -- I mean, look, I'm not thrilled with the idea that we issued shares at an effective price of $6.98 and we're then were to buy it back at $5.90. I guess that's the silver lining in the cloud. I'd rather have the problem of deciding how much to buy back at $7. But the fact is, is that the market pushed the stock to a place where we thought it was a significant value. And so we bought a lot.

And Jessica, I'd -- this is Jim. I'd also point out we discuss this topic every single Board meeting, and we enlighten our Board with every relevant fact that we think they need to be able to form an opinion on this. They are extremely engaged on this. And I think it is what you see it as.

Your monetization of Pandora, as I thought, was pretty impressive. You gave a few reasons for it. Wonder if you could elaborate a little bit on the programmatic ad side, please. Maybe explain a bit more what you're doing there, if you've got a figure in terms of percentage of revenues from programmatic to offer. And also, if you could talk a little bit about what you might be doing on the SiriusXM side. I know it's a very small number for advertising, but if there's anything you're doing with the data from Pandora to help the programmatic ad business on that side as well.

I don't believe we're going to break out the revenue by all these different categories. But I can tell you the question on programmatic is quite simple. A year ago, we simply didn't really have the capability in any meaningful way with the acquisition of AdsWizz. And you bring up an important point. And that is, we all want to talk about the investment in content.

I think the other thing I'm firmly committed to as we delve much deeper in the digital advertising business is obviously, the value of technology is extremely important. And we're very pleased with what's happened with AdsWizz, and we're very pleased also with what Pandora has developed in terms of programmatic capabilities. Clearly now, most of our major big advertisers demand that they can use some portion of their budget for programmatic. And so we're really pleased with how programmatic performed in the second quarter.

I don't want to correct what you said. I just want to maybe take a slight exception. Our advertising business at SiriusXM has been growing quite nicely. And look, it's growing faster or -- at certainly the same kind of rate as the Pandora performance in the second quarter. So we're really pleased also with that business. It's a different business because it is not "digital oriented," but it's great to have both.

Yes. I think the monetization really is driven by sell-through, and programmatic is part of what's helping to drive the sell-through. It gives the team another tool to pull out of the box, and it just is -- it's helpful in driving a greater share of ad budgets from advertisers and agencies.

The -- on the SiriusXM side, the -- look, the team in ad sales at SiriusXM continues to knock the cover off the ball. They -- we like to beat up everybody over hitting their numbers. So I don't want to say too many nice things about them. But they do -- they still maintain double-digit growth rates in advertising. And so just overall, both the Pandora side and the SiriusXM side, the ad teams are really, really killing it.

For Jim. Obviously, you've -- you did mention on the call that 360L is the long-term future of the company. Can you just broadly talk about the cadence of how that's going to get rolled out over multiple years? When is it going to be sort of the DNA of the company given sort of the long lead times? And again, obviously, you haven't had a lot of units on it so far given it still is pretty early. If there is any experience engagement that you can sort of talk about and what consumers that have it are experiencing. And then very (inaudible)...

Yes. So let's do the last one first. The cycle times are a little longer, right? So when things show up in pen rate, it's at the install level. And then they've got to work their way through the dealership chain into consumers and then get through the trial period before they hit self-pay. So I would say that the headunit change had virtually no impact on second quarter subscriber additions, self-pay additions. And so the effect of that will really come through in sort of the second half and late part of the year, which again, if you come back to the comments about how we feel about hitting the year in the guidance, it sort of accentuates how strongly Jim and I think -- how confident we are that despite what will be a headwind in the second half from the headunit change, that we remain confident of hitting the full year guidance. And I'll turn it back to Jim.

Yes, Vijay, I think we try to get a little too surgical sometimes on this -- on the penetration number. I think David said 2 things, and I want to emphasize that. There is a mix issue going on between cars sold at retail and cars sold to fleets. And when they shift to fleets, which historically happens in this industry either when inventories get a little high or when the economy gets a little unsteady, that shift occurred. That certainly occurred in both the first and second quarter. We're assuming it continues to occur in our guidance for the rest of the year.

Also, one other phenomena going on that we have no control over is as you know, we're heavily, heavily penetrated in every single automaker. But with the vast majority of the automakers, we're not 100% penetrated, meaning all of them have very low entry-level cars that they continue to offer that have the lowest kind of features across everything, including -- not including satellite radio. Clearly in the second quarter, the retail pressure on automobiles forced the mix also to go a little way that way. We're assuming that also continues in our guidance in the second half.

And your comment regarding SAAR, we're kind of assuming things stay kind of the way we are.

And so I think we got it lined up. We think we have a good perspective on it. There are -- I want to reemphasize we are right where we think we -- we are right -- David said it for -- we are right where we thought we would be, and we're pleased with where we are, and we feel really good about the second half and being well positioned.

Back to your comment on 360, Vijay. Your comment -- your frustration is my frustration, which is it takes a long time to roll things out in the automotive industry. And the flip side of that is, once you roll it out, it stays for a long, long time. These aren't things that come and go. And so both our kind of challenges, also our strength.

360L is now on a steady march. And having the largest automaker in the country rolling out across their entire line at the pace they are with GM -- I'll correct you, it's not Cadillac, it's going across multiple GM brands now, okay? -- is a big step for us in 2019. That will accelerate in '20, and I think you see a real stepping stone in '21.

I can't give you any hard data about what is 360L doing for our KPIs. I can tell you -- common sense will tell you it has got to improve listener engagement and listener satisfaction. It is just so fundamentally easier and such an improved customer experience. So I remain extremely bullish on this.

I can tell you I've been here now 15 years. I can't tell you how many times I've tried to make the auto industry go faster than they're going to go. They are going to go at the pace they're on. The great news is we're on a really strong trajectory here, and I feel really good about what this is going to bring our shareholders going forward and our listeners.

David, if you look at the first half EBITDA numbers you guys put up and then your comment or Jim's comment on Pandora making money for the year, the second half -- the full year guidance looks quite conservative, at least to me. I'm just curious if there's anything on the cost side you would call out at the Sirius business in the second half, whether it's marketing around the streaming product launches you guys have or content costs that we should be keeping in mind.

And then for Jim and Scott, when you think about this partnership with Drake, he could probably go -- I'm sure he could go anywhere, not probably, he could go anywhere. I'm sure there's lots of bidders for his content and his brand. I think he has done deals with Apple in the past. Why does he go to Sirius? And do we need to be thinking sort of an arms race here for top talent that's going to cost a lot of money like we saw pre-SiriusXM merger back in the day? Or do you think that this is beyond just the highest bidder but actually the platform is differentiated and that's helping you secure this kind of IP? I'd love your thoughts on that topic.

So -- okay. So let me start first, Ben, and I'll give you my assurance that I do not believe this is the start of a bidding war. I do not believe that's why Drake made the decision he made. I do believe, quite candidly, that if both companies weren't together and had the strength of this massive audience that we now have, that we probably would not have been able to do the deal that we structured with Drake. Scott, you want to take it?

Yes. And also, look, they are as smart and -- or Drake himself and his organization, as you can get, they did their homework, and I think the creative freedom and the history of dealing with iconic artists, how we do and our support in a lot of ways of that, where there's no doubt that their creative vision can be executed and put on our platform, was a factor.

As to economics, there are many examples of what we've done and we have consistently said, as David said, business models matter. This is not an example of that.

So Ben, I think it plays into your question on EBITDA. And it -- people asked us when we announced that Pandora acquisition if we were sort of attitudinally prepared to invest in growth. And when you kind of look at the team you have sitting around the table that -- Jennifer joined in, I think 2002; I joined in 2003; Scott and Jim joined in 2004; and Pat Donnelly sitting here, I think he's from like the '90s. He's like the carpet that came with the office. And the -- this is a team of people who collectively invested $12 billion building the satellite radio business first. Then we turned and we acquired a huge audience and scaled digital ad technology with the Pandora base. And we really believe that we can drive this business, and we're not afraid to invest. And we've been saying it repeatedly, we have lots of investments under way like in Drake and in content, in ad technology, in product enhancements and in distribution. And the -- one of the challenges for us as we have all these investment initiatives that go -- that we have under way, sometimes you can't do them as fast as you'd like to. And so if there is upside in EBITDA, it will in part be due to the fact that we probably can't move as fast as -- it's kind of going to the buffet line when you're hungry and you just can't load that plate fast enough. There's -- this is an incredibly strong business model, gives us a lot of discretion over how we invest money.

Ben, I'd also like to point out we traditionally spend more of our brand-focused money in the fourth quarter because we think it gets a lot more bang around the holiday periods as well. So I don't actually know the exact timing. David and Hooper can take you through that. But I can tell you we're -- we've got pretty solid plans for what we want to -- how we want to promote our brands as well in the fall.